Why We Ask:

Our mission and operations are funded 100% by conservatives like you. Please help us continue to extend Liberty to the next generation and support the 2021 Year-End Campaign today.

Ben Shapiro / September 7, 2011

There’s No Such Thing as ‘Crony Capitalism’

This week, Sarah Palin gave a terrific speech in Indianola, Iowa. In it, she tore into the Washington political class. Men and women in government get wealthy by “bail(ing) out their friends on Wall Street and their corporate cronies…reward(ing) campaign contributors…buy(ing) votes via earmarks…And there is a name for this: It’s called corporate crony capitalism…It’s the collusion of big government and big business and big finance to the detriment of all the rest – to the little guys.” This “crony capitalism,” Palin said, is “not the capitalism of free men and free markets.” It is the “crony capitalism that destroyed Europe’s economies.”

This week, Sarah Palin gave a terrific speech in Indianola, Iowa. In it, she tore into the Washington political class. Men and women in government get wealthy by “bail(ing) out their friends on Wall Street and their corporate cronies…reward(ing) campaign contributors…buy(ing) votes via earmarks…And there is a name for this: It’s called corporate crony capitalism…It’s the collusion of big government and big business and big finance to the detriment of all the rest – to the little guys.” This “crony capitalism,” Palin said, is “not the capitalism of free men and free markets.” It is the “crony capitalism that destroyed Europe’s economies.”

In general, she’s right. But on one particular – her terminology – she is dead wrong.

The fact is that there is no such thing as “crony capitalism.” It is a term created by the left in order to slander capitalism wholesale. Liberals love the term, since it implicitly argues that capitalism is unfair; the game is rigged, they state. Noam Chomsky is a case in point – he says that all capitalism is crony in nature. “When people talk about greedy capitalists, that’s redundant,” says Chomsky. “You have to be a greedy capitalist or you’re out of business. In fact, it’s a legal requirement that you be a greedy capitalist and that you don’t pay attention to what happens to anyone else.”

What is “crony capitalism,” then, if not capitalism? In reality, it is corporatism, a modern form of mercantilism. Corporatism is based on the notion that industries comprise the economy like body parts comprise the body – they must work in concert with one another, and they must take central direction. Corporatism isn’t out-and-out socialism – in out-and-out socialism, the industries are owned by the government. But in corporatism, private industry exists, heavily regulated and subsidized by its friends in government.

Historically, corporatism has been a plank in the progressive platform. Woodrow Wilson was a corporatist; so was Teddy Roosevelt. “The effort at prohibiting combination (corporate growth) has substantially failed,” said progressive Roosevelt. “The way out lies, not in attempting to prevent such combinations, but in completely controlling them in the interest of the public welfare.”

Franklin Roosevelt felt the same way. “If all employers in each trade now band themselves faithfully in these modern guilds – without exception – and agree to act together and at once, none will be hurt and millions of workers, so long deprived of the right to earn their bread in the sweat of their labor, can raise their heads again.” Government combination with corporations springs from the socialistic left, not the free market right.

But the right has been fooled into accepting the “crony capitalist” language. That’s because so many on the right, in knee-jerk fashion, assume that corporations are inherently capitalistic. They aren’t. Corporations simply act in their own self-interest. They are no more capitalistic than the citizens who vote themselves welfare dollars. When Gordon Gekko says, “greed is good,” that’s not the essence of capitalism – it’s the essence of the corporate mission, which says that shareholders must gain value, whether through taxpayer dollars or market competition.

That’s why Thomas Edison, one of the greatest American entrepreneurs, believed in corporatism – corporatism run by him. “A lawyer cannot draw a law covering the complicated conditions of modern industry,” he said in 1911. “What is wanted is some person familiar with the selling and buying, the technical as well as the financial end of all industries, to devise some generic scheme that business can work on.” Today, Jeff Immelt, who runs Edison’s GE, says the same thing. And both Edison and Immelt want to be the corporate gurus who write the laws.

Capitalism is not crony. Capitalism is far more. In the words of ultra-capitalist Ayn Rand, “Above all, capitalism does not permit anyone to expect or demand, to give or to take, the unearned.” What we are watching today is corporatism – the same economic fascism that destroyed Nazi Germany, threatened Depression-era America and is busily ruining American industry today.

COPYRIGHT 2011 CREATORS.COM.

Start a conversation using these share links:

Who We Are

The Patriot Post is a highly acclaimed weekday digest of news analysis, policy and opinion written from the heartland — as opposed to the MSM’s ubiquitous Beltway echo chambers — for grassroots leaders nationwide. More

What We Offer

On the Web

We provide solid conservative perspective on the most important issues, including analysis, opinion columns, headline summaries, memes, cartoons and much more.

Via Email

Choose our full-length Digest or our quick-reading Snapshot for a summary of important news. We also offer Cartoons & Memes on Monday and Alexander’s column on Wednesday.

Our Mission

The Patriot Post is steadfast in our mission to extend the endowment of Liberty to the next generation by advocating for individual rights and responsibilities, supporting the restoration of constitutional limits on government and the judiciary, and promoting free enterprise, national defense and traditional American values. We are a rock-solid conservative touchstone for the expanding ranks of grassroots Americans Patriots from all walks of life. Our mission and operation budgets are not financed by any political or special interest groups, and to protect our editorial integrity, we accept no advertising. We are sustained solely by you. Please support The Patriot Fund today!

★ PUBLIUS ★

“Our cause is noble; it is the cause of mankind!” —George Washington

The Patriot Post is protected speech, as enumerated in the First Amendment and enforced by the Second Amendment of the Constitution of the United States of America, in accordance with the endowed and unalienable Rights of All Mankind.

Copyright © 2021 The Patriot Post. All Rights Reserved.

The Patriot Post does not support Internet Explorer. We recommend installing the latest version of Microsoft Edge, Mozilla Firefox, or Google Chrome.